The Frederick Board of Aldermen have adopted an $80.4 million budget that includes a 4-cent overall decrease in the property tax rate paid by residents and higher fees for water and sewer service.
The budget for fiscal 2013 passed 4-1 on Thursday, with Alderman Shelley Aloi (R) voting against.
Aloi said her opposition stemmed from the increase in city spending sought in Mayor Randy McClement’s proposal. The budget passed by the aldermen was $6.4 million more than was spent in fiscal 2012 — a 5.8 percent increase.
The increased funds will be spent to give city employees a 3 percent raise, replace equipment and hire new personnel. Personnel costs are up about $670,000 from fiscal 2012, which ends June 30.
The biggest obstacle to passing this year’s budget was the best way to spend $1 million of a $4 million fund balance in the budget.
Each alderman sought to spent the money on projects they prioritized. Instead, the lawmakers struck a compromise Thursday, to spend $1 million from the city’s fund balance on a variety of projects, including retiree benefits and pensions ($400,000 each) and a shared-use bike path on the Golden Mile ($200,000).
The fund balance, also discussed at a meeting on Wednesday, typically is used to pay for unexpected expenses, such as emergency road repair.
“As prudent financial managers trying to mitigate our risk, we need to fund one or both [funds],” said Alderman Karen Young (D) said. “I also think it’s prudent to all of us to work on this bike path. We want to improve our roads, our air quality.”
The combined property tax rate for Frederick city residents, who also pay taxes to the county government, will decrease by 4 cents per $100 of assessed property value.
The decrease stems from a decision by the county government to allow municipalities, including Frederick city, to switch to a different tax plan. Under the new plan, the county lowers its tax rate and allows municipalities to raise theirs.
In fiscal 2013, the city’s property tax rate will be 73.2 cents per $100 of assessed value — up from 65 cents per $100 of assessed value in fiscal 2012. However, the overall rate paid by city taxpayers through city and county taxes is 4 cents lower than last year. Under the new plan, someone with a $200,000-home will pay $82 less annually in property taxes.
The aldermen also voted 4-1 to raise water and sewer rates by 10 percent. Aloi also voted against the rate increase.
According to the city’s utility website, a family of four pays on average about $275 every 90 days for water. The new rate would push this to $302.50.
The increase is aimed at funding rising maintenance costs and updates to the waste water treatment plant to meet state and federal mandates for cleaning the Chesapeake Bay.
Alderman Michael O’Connor (D) said the city had to raise the rates to make up for past years when the rate wasn’t adjusted appropriately.
“I get tired at times of saying decisions we didn’t make are the ones we have to deal with,” he said. “Again, decisions were made in previous years to not keep up with a regular course of rate increases when the system was projectable, when you could see what new infrastructure was going to be.”